Latvian bank Reģionālā Investīciju Banka (RIB) has been fined €473,076 over fund source detection “irregularities” and inadequate risk management.
Watchdog Financial and Capital Market Commission (FCMC) said it identified irregualtireis in detecting the source of funds during an on-site inspection into large value cash transactions carried out by the bank’s high risk clients from high-risk jursidictions.
The 2019 inspection found that the bank had on occasions failed to verify the origin of financial resources, failing to obtain documents verifying the origin of the cash paid into its customer accounts.
FCMC also concluded that the Bank had not ensured an effective internal control system for the transactions examined during the inspection.
An FCMC spokesperson said: “The Bank failed to ensure adequate risk management and was exposed to disproportionate reputational risk”
“According to regulatory requirements, if a client from a high-risk jurisdiction performs a large value cash transaction, it is considered to be a high-risk exposure. Such transactions should be subject to an enhanced customer due diligence and requirements include the package of measures to be taken by banks to ascertain the legal origin of financial assets.”
A spokesperson for RIB said: “This decision relates to discussion about past shortcomings in some specific internal controls – all of which have since been strengthened and brought into full compliance with the requirements of the industry regulator and relevant legal acts.
“The bank is fully committed to ensure an uncompromising culture in fighting money laundering, terrorism financing, proliferation or sanctions evasion.”